Swiss Banks Agree to US Tax Deal

Related Articles

ZURICH— The first Swiss banks have signaled their readiness to work with U.S. officials in a crackdown on wealthy Americans evading taxes and many more are expected to follow in the coming weeks, in the latest blow to Switzerland's cherished bank secrecy.

The deal between the United States and Switzerland, agreed in August, is part of a U.S. drive to lift the veil of Swiss bank secrecy. In 2009, this led to UBS paying $780 million in a settlement where the bank agreed to hand over U.S. client names with secret Swiss accounts.

The U.S. pursuit of tax dollars sheltered in offshore accounts has piled pressure on Switzerland, the world's largest offshore finance center with more than $2 trillion in assets.

The Swiss government in June bowed to repeated attacks on banking secrecy, deeply embedded in the country's culture, and will share data on foreign depositors if a global standard is established.

Under this latest U.S. deal, Swiss banks were given until Monday by their regulator to say whether they would take part in the government-brokered program open to a host of second-tier Swiss banks.

The program, which lapses at year-end, requires the banks to hand out some previously hidden information and face penalties of up to 50 percent of assets they managed on behalf of wealthy Americans. If the banks shun the U.S. offer, individual firms and senior staff risk criminal prosecution.

The regulator FINMA said on Tuesday that most had done so, and that it expected several more to do so shortly, without disclosing what the banks had decided.

Valiant Holding and Berner Kantonalbank, two mainly retail banks, said they would come clean on any past transgressions and face up to fines.

The fines are scaled to reflect how egregiously the banks acted in their dealings with U.S. customers. Fines would have to be disclosed to investors because they could have an impact on share prices.

A third -- Zurich-based private bank and securities firm Vontobel Holding AG -- said it would also participate. But it put itself in a category of institutions that have not committed any U.S. tax-related offenses and are therefore exempt from penalty payments.

The bank began transferring business with wealthy Americans into an entity registered with the Securities and Exchange Commission in 2008, when the crackdown on Switzerland's banks intensified.

How many of Switzerland's 300-plus private banks come forward under the program is also key for banks facing criminal investigations, which includes some of Switzerland's biggest banks such as Credit Suisse and Julius Baer and Pictet & Cie.

A host of listed private banks such as EFG International and Banque Cantonale de Geneve said they had yet to make a decision. St. Galler Kantonalbank, which owns private bank Hyposwiss, said it had informed the Swiss regulator of intention, but would only tell investors what it had decided when it had been formalized by its board.

These publicly-listed banks, which are subject to disclosure rules, give the first indication of how many firms will cooperate with the U.S. authorities under the plan.

But most of Switzerland's private banks are not listed and under no obligation to make their decision public.

Major player Lombard Odier & Cie said it is still evaluating what to do. Others such as J. Safra Sarasin, Union Bancaire Privee and Mirabaud did not respond to request for comment on Tuesday.

A legal expert said FINMA's Monday deadline was merely intended to take the temperature of Swiss banks' intentions, and that they have three more weeks until the legally-binding deadline to take up the deal lapses.

“I think roughly 100 banks will end up coming forward - the coming weeks will show how many succumb to the pressure,” Peter V. Kunz, professor of business law at Berne University, said.

A failure to cooperate could also hold up a settlement for Credit Suisse, Julius Baer, Pictet, and local government-backed Zuercher Kantonalbank (ZKB), which have seen settlement talks with U.S. justice officials frozen pending a solution for the wider industry.

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.

Video

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.

Video

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.

Video

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.

Video

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

Video

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.

Video

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.

Video

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.

Video

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.

Video

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.

Video

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.

Video

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.

Video

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.

Video

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.

Video

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.

Video

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.